This blog provides news and commentary on public policy, business and economic issues related to the $3 billion California stem cell agency, officially known as the California Institute for Regenerative Medicine(CIRM). David Jensen, a retired California newsman, has published this blog since January 2005. His email address is djensen@californiastemcellreport.com.

Thursday, December 06, 2012

A blue-ribbon study of the $3 billion
California stem cell agency today said the program has “achieved
many notable results,” but recommended sweeping changes to remove
conflict of interest problems, clean up a troubling dual-executive
arrangement and fundamentally change the nature of the governing
board.

The recommendations from the 17-month
study by the Institute of Medicine (IOM) would strip the board of its ability to approve individual
grants, greatly strengthen the role of the agency's president,
significantly alter the role of patient advocates on the governing
board and engage the biotech industry more vigorously.

Harold Shapiro, chairman of
IOM-CIRM panel
Princeton University Photo

Harold Shapiro, former president of
Princeton University and chairman of the IOM study panel, said,

“Overall, CIRM (the California
Institute for Regenerative Medicine) has done a remarkably good job”
in giving the state a prominent position in regenerative medicine.
But he said the stem cell field has “evolved”and CIRM needs to
change with it.

As for turning research into cures, the
report said,

“The challenge of moving its research programs
closer to the clinic and California’s large biotechnology sector is
certainly on CIRM’s agenda, but substantial achievements in this
arena remain to be made.”

Asked for comment, J.T. Thomas, chairman of the CIRM governing board, said it was premature to offer an opinion on the report, which will be presented to directors Dec. 12 at their Los Angeles meeting. (See here for the full text of Thomas' remarks.)

The study was conducted at the behest
of CIRM, which paid the IOM $700,000. The IOM is a prestigious
non-profit organization that was created in 1970 to provide
authoritative advice to policy makers and the public.

In 2010, when directors authorized the
study, Robert Klein, then chairman of the CIRM board, and other board
members said that they hoped the study would lead to
another multibillion dollar state bond issue to support the
agency(see here and here). Duane Roth, a San Diego businessman and co-vice chairman of
the CIRM governing board, was the lone no vote on the study. He
warned directors that that they could not “go in just sort of blind
trust that (the IOM is) going to reach the conclusion you want them
to reach.”

The agency will run out cash for new
grants in four years. Currently California remains in the throes of
state budgetary problems, and the agency has put on hold talk of another bond
election. It has also broached the possibility of
seeking private funding.

The IOM report said the agency should
develop a full-blown “sustainability platform” and plans that would
spell out its likely financial structure and future rules on grants
and their administration, including intellectual property.

“Far too many board mem­bers
represent organizations that receive CIRM funding or benefit from
that funding. These com­peting personal and professional
interests com­promise the perceived independence of the ICOC(the
CIRM governing board), introduce potential bias into the board’s
decision making, and threaten to undermine confidence in the board.”

The IOM cited an ongoing scandal in Texas dealing with that state's $3 billion cancer agency. The flap
has led to mass resignations of the agency's grant reviewers. The
IOM said,

“Recent controversy surrounding the
Cancer Prevention and Research Institute of Texas grants process
illustrates the importance of rigorous scientific review free from
inherent or perceived conflict and the consequences when these
boundaries appear to be breached.”

However, the IOM press release said,

“Because the committee was not
charged with reviewing CIRM's past funding decisions, it did not
identify any specific cases of conflict.”

The IOM surveyed members of the board (ICOC) about conflicts of interest. The report said,

"While a majority of respondents stated
that personal interests did not play a role in their work on
the ICOC, some responses were more equivocal. One respondent replied that it was 'hard
to tell' given that 'so many decisions take place off camera in secret meetings,' while another
acknowledged that ICOC members are human, and of course their decisions are influenced by
personal beliefs and interests."

To help deal with conflicts of
interest, the IOM recommended that the CIRM governing board not be
allowed to approve individual grants. Instead, the board would be
given a slate of applications that would be approved as a block. All
CIRM board members would be removed from the grant review committee
and the grant review process would be turned over to the president of
the agency, currently Alan Trounson.

The IOM recommended that a majority of
the board consist of “independent” members and said that the
board should not be increased beyond its current 29 members, although
it could be shrunk.

Conflict of interest rules should be
revised to deal with personal conflicts, which could have a major
impact on the 10 patient advocate members of the board but also
other directors and possibly staff who have family members with health issues. The report said,

“California law focuses primarily on
financial conflicts of interest, but the committee believes that
personal conflicts of interest arising from one’s own or a family
member’s affliction with a particular disease or advocacy on behalf
of a particular disease also can create bias for board members.
Studies in psychology and behavioral economics show that conflict of
interest leads to unconscious and unintentional 'self-serving bias'
and to a 'bias blind spot' that prevents recognition of one’s own
bias. Bias distorts evaluation of evidence and assessment of what is
fair.”

The IOM said that the board is much too
involved in operational matters, including the chair and the two
vice-chairs. The report said,

“The board should transfer management
responsibilities to management so it can provide truly independent
oversight and evaluation of management, strategic planning, and broad
direction for resource allocation.”

Many of the IOM's recommendations would
require either legislative approval or another ballot initiative.
However, changes in the Prop. 71, the ballot initiative that created CIRM, require a politically difficult super, supermajority
vote (70 percent) of the both houses of the legislature and the
signature of the governor. The requirement was written into the
10,000-word initiative and has been used by CIRM to block legislation
that it did not favor.

Here is brief rundown on some of the
other IOM recommendations:

Greater engagement with industry to
commercialize stem cell research. Noting that industry has received
only 6 percent of the agency grants, the report said business
representation on CIRM working groups and other committees “should
be enhanced to leverage industry’s expertise and resources in
product development, manufacturing, and regulatory approval in
support of the ultimate goal of bringing therapies to patients.”

Elimination of the current process in
which applicants rejected by reviewers appeal publicly to the
governing board. Noting that 32 percent of “extraordinary
petitions” have been successful, the report said they “undermine
the credibility and independent work” of grant reviewers. Instead
appeals would heard only by staff behind closed doors.

Creation of a new scientific advisory
board, appointed by the CIRM president with a majority from outside
of California, instead of multiple advisory groups. The report said,“Such an external board would be
invaluable in vetting ideas for new RFAs, suggesting RFAs that
otherwise would not have been considered, and helping CIRM maintain
an appropriate balance in its research portfolio. Input from this
board would help CIRM make fundamental decisions about dealing with
challenges that cut across particular diseases, decide which
discoveries should progress toward the clinic, and determine how best
to engage industry partners in developing new therapies.”

Funding of programs on bioethics and
regulatory problems. The report said,“It is difficult for researchers to
find appropriate funding for stem cell-specific ethics and policy
work, and filling this funding gap is well within CIRM’s budget.”

One final note: As mentioned
earlier, Duane Roth, co-vice chairman of the agency, was the only no
vote on the board when it authorized the IOM study in 2010. The IOM today said,

“The critical tasks performed by the
vice chairs should be reassigned to management. In particular, the
important tasks of government relations and corporate relations both
should be carried out by staff reporting to the president rather than
by the vice chairs of the board.”

About Me

The California Stem Cell Report is the only nongovernmental website devoted solely to the $3 billion California stem cell agency. The report is published by David Jensen, who worked for 22 years for The Sacramento Bee in a variety of editing positions, including executive business editor and special projects editor. He was the primary editor on the 1992 Pulitzer Prize-winning series, "The Monkey Wars" by Deborah Blum, which dealt with opposition to research on primates. Jensen served as a press aide in the 1974 campaign and first administration of Gov. Jerry Brown. (Time served: two years and one week.) He writes from his sailboat on the west coast of Mexico with occasional visits to land. Jensen began writing about the stem cell agency in 2005, noting that it is an unprecedented effort that uniquely combines big science, big business, big academia, big politics, religion, ethics and morality as well as life and death. The California Stem Cell Report has been identified as one of the best stem cell sites on the Internet. Its readership includes the media (both mainstream and science), a wide range of academic/research institutions globally, the NIH and California policy makers.